Attorneys representing Safelite have sent a letter to the U.S. Second Circuit Court of Appeals notifying that court of “a recent decision relevant to [their] pending appeal” to halt enforcement of Connecticut’s anti-steering law. “In American Meat Institute versus U.S. Department of Agriculture, the D.C. Circuit held that the test articulated in Zauderer versus Office of Disciplinary Counsel, applies to compelled commercial disclosures that serve government interests besides preventing consumer deception. In doing so, the court adopted the approach already followed in this Circuit. Yet, the court also addressed issues related to Zauderer’s scope that are relevant to this appeal,” the company’s attorneys claim.
Safelite has sued state Attorney General George Jepsen and Thomas Leonardi, state insurance commissioner, and asked for an injunction to halt enforcement of Public Act 13-67 (an Act Concerning Automotive Glass Work). After the District Court judge decided against an immediate injunction to halt enforcement, Safelite appealed this decision to the Appellate Court. A hearing was held at the Appellate level in late May and a decision has not yet been handed down.
“First, the court held that ‘to match Zauderer logically, the disclosure mandated must relate to the good or service offered by the regulated party. … Indeed, the court emphasized that the regulation could be evaluated under Zauderer because it ‘requires the disclosures to be of purely factual and uncontroversial information about the good or service being offered’ and ‘the facts conveyed are directly informative of intrinsic characteristics of the product AMI is selling,’” Safelite’s attorney claim. “The opinion therefore supports appellants’ argument, set forth on pages 13-17 of the opening brief that compelled speech about third-party services must be subject to more than mere Zauderer review.”
Safelite’s attorney also claims the court noted “the possibility that some required factual disclosures could be so one-sided or incomplete that they would not qualify as ‘factual and uncontroversial,’ recognizing that a disclosure could ‘communicate a message that is controversial for some reason other than dispute about simple factual accuracy’ and thereby fall outside Zauderer’s scope. That ‘possibility’ appears in this case, where the compelled speech effectively communicates an endorsement of a competing business.”
Finally, Safelite’s attorneys write that the “court held that Zauderer cannot ‘sustain mandates that ‘chill protected commercial speech.’ As appellants argue on pages 21-25 of their brief, because the obligation to endorse a competitor is triggered by Safelite’s protected commercial speech, PA 13-67(c)(2) imposes a content-based burden that chills protected speech.”
Safelite’s attorneys take particular issue with a small portion of the act—PA-13-67(c)(2).
“It prohibits an insurance claims administrator (TPA) from informing policyholders about an affiliated glass repair business unless the administrator simultaneously refers policyholders to a local competitor’s glass repair business,” Safelite attorneys explain.
They argue that by requiring the company to name a competitor, “it puts appellants Safelite Group Inc. and Safelite Solutions to a Hobson’s choice: Either discontinue wholly truthful speech advising customers about Safelite-owned vehicle glass repair services, or when making such representations, also provide a referral to a competing local glass repair shop. The First Amendment protects against such attempts to commandeer speech—even commercial speech.”
On the other side of the courtroom, Connecticut’s attorney claims, “Safelite Solutions has been extraordinarily effective at steering consumers to Safelite AutoGlass.”
“[C]onnecticut has a statutory policy of protecting consumer choice in automotive insurance repair work. The Connecticut legislature enacted Public Act 13-67(c) (2) because it determined that existing statutes did not adequately prevent insurance claims administrators from undermining consumer choice by steering consumers to affiliated auto glass repair shops.”
The Appellate Court has not issued any new decision at press time.
To view a copy of Safelite’s letter, click here.